Why budgets dont work for spendthrifts

MONTREAL — Starting the New Year broke and in debt?If you’re beyond budgeting, trying to cut back on spending in small ways may work best, say experts who offer simple tips on saving.Credit counsellor Margaret Johnson says budgets don’t work for spendthrifts.“They start off with the best of intentions, but the reality is no, they don’t work,” said Johnson, president of Solutions Credit Counselling Canada in Surrey, B.C.Here is a list of tips that cover credit cards, spending, shopping and hanging on to spare change.Credit cards: Johnson suggests getting a credit card that gives you cash back rather than points, saying the money is more useful.For those with credit card debt, make two payments every month that are tied to when you get paid to cut down on interest charges, she added. Also know how much interest you are paying.“Most people don’t pay their credit cards in full,” she noted.Cash: The Penniless Parenting blog says spendthrifts should use cash as much as possible and recommends carrying around a $50 or a $100 bill. See how long that bill can last without being broken.“Do I really want to break a $100 bill?” says the blog’s author, who is only known as Penny.Penny also recommends waiting 24 hours before buying anything that costs more than $100 and having a “buddy” — a spouse, partner or friend — you can call before spending $50 or more.She also recommends that spendthrifts avoid window shopping or malls and other “problem spots” for spending.“Just don’t go there. Change your route.”Johnson adds that couples can give each other a weekly “allowance,” or if one half of the couple has trouble with spending, he or she can get a weekly amount.Household debt is a problem and Canadians have been borrowing like never before with help from low interest rates. Statistics Canada recently said the household debt to income ratio has risen to a record high of 164.6 per cent.Smart shopping: Fashion blogger Marta Tryshak notes shopping must not take priority over essentials for big spenders.“You shouldn’t be compromising your heat over a new bag,” said Tryshak, creator of the blog withlovegabrielle.com.Tryshak said online stores have more variety and it’s easier to research what you want and compare prices.She said Revolve Clothing, which sells trendy items, offers free shipping to Canada and if you type the word “tulip” at the online checkout, you get a 10 per cent discount.Tryshak recommends subscribing to a select few retailer newsletters and social media for special deals. For example, she says online women’s fashion boutique Aritzia will email a code that a shopper can take into a store and get a list of exclusive sales while other shoppers will be paying full price for the same items.Website retailmenot.com provides coupons for discounts on clothing, shoes and other items, Tryshak said.Tryshak also said the best deals on the little black dress and cashmere knits are just after Christmas.“They never go out of style but they do go on sale.”Groceries and cooking: http://www.groceryalerts.ca helps save money on groceries with Canadian coupons and grocery flyer deals.Blogger Penny of Penniless Parenting suggests using a crockpot so that you can come home to a hot meal and avoid eating out.“People spend a lot of money on takeout because they don’t have the energy to cook after a long day,” she said.Spend time at each other’s houses instead of going to bars and restaurants, Penny added.Get together with some friends and buy groceries in bulk, offered credit counsellor Margaret Johnson.Spare change: If you’re not going to roll your coins, take it to a change machine, often in a grocery store, to get the cash back. It doesn’t do any good just sitting in a jar, Johnson said.Break the cycle with small steps: Just say “No” to some spending. Buy one less coffee or one less lunch a week or choose something that’s relatively easy for you to spend less on.“Pay attention to what you want to do with your money. Where am I today and where do I want to be tomorrow or six months from now?” Johnson said.“You’re working really hard for your money.”So at least try to save a bit in 2013. read more